second home tax help

santana007

Hi
Not sure where to post this question !!

can anyone please help ..

We brought my parents house around 15 years ago to help them with debt .. My mum has since died , but my Dad still lives there .. We don not and never have charged any rent ..
Is there any tax benefit we could claim .. or anyway we could say we were charging rent so he could claim it back from social service .. He is 88 ..

Since we have owned this property our own mortage has just been on interest only , with rising cost's we are finding it tough to manage .. I am a househusband so we are just on my wife's money


cheers

Rog

Colincbayley

If you just say he was paying you rent ( when he wasn't ) then you would not only have to pay the tax on the rent ( that you didn't get ) plus fines and penatlies going back 15 years. But you would also be committing fraud.
Don't even go there with that one, it is just not worth it.

Looking forward, I don't know if you could now start charging him rent in order that he then claims Local Housing Allowance and/or other benefits. You might be better off re-posting your question on the benefits board.

scottishblondie

You can't start charging him rent now in order to claim housing benefit, look up "Contrived Tenancy". In order to claim HB for renting from a family member it has to be proved that you are operating like a commercial tenancy - ie that he has been paying rent at a market rate for the duration of his tenancy and that you would evict him if he was unable to pay the rent. Perhaps he is elligible for some kind of help with his council tax payments tho? I'm not clued up on that sort of thing but if he is on a low income then it's worth checking out.

PasturesNew

Profits yet to materialise ... if you can stay solvent long enough.

A combination of two phrases, which can catch you out.

As has been said, you can't now charge rent as it's a contrived tenancy: "you're only charging rent to get money from the social"

So, your choices are:
- find some way to keep yourself afloat, maybe take on an evening/weekend job, go through your expenses with a fine tooth-comb, with the help of the other boards here, and shave back your costs of living.
- sell his house and buy him a nice bungalow. Although you'll have to pay CGT on the profits, as there are two of you the first £20k is tax free.
- sell his house and rent him a nice assisted living place, or buy one.

bigbigmamamoo

PasturesNew wrote: »

Profits yet to materialise ... if you can stay solvent long enough.

A combination of two phrases, which can catch you out.

As has been said, you can't now charge rent as it's a contrived tenancy: "you're only charging rent to get money from the social"

So, your choices are:
- find some way to keep yourself afloat, maybe take on an evening/weekend job, go through your expenses with a fine tooth-comb, with the help of the other boards here, and shave back your costs of living.
- sell his house and buy him a nice bungalow. Although you'll have to pay CGT on the profits, as there are two of you the first £20k is tax free.
- sell his house and rent him a nice assisted living place, or buy one.

I'd add, have him take in a lodger
have him move in with you and rent out his place
rent a smaller place for him, and rent out his place

santana007

Cheers guys

i already earn a little extra as a photographer .. Weddings and portraits ..

He is happy where he is , so wouldn't want to push him into something he might not like .. Even though at 88 a 3 bed semi is simply to big for him ... At this moment in time we have a good few thousand in the bank , but that isn't working for us at the moment , don't know the best place to put it .. All i see is if mortage rates shoot up our savings will go down the drain .. We also pay £250 a month into share save with Lloyds where my wife works .. We could stop that but we got the shares at 35p a share .. They are around 77p at the moment , and we own almost 20,000 shares , but have to keep them for 3 years before we can touch them .. So we just need something to keep us going untill then ..
I know it might sound from what i have said we are more than ok ... But it's just all tied up .. Bl**dy frustrating ...

cheers

Rog